L.A. Mayor Garcetti tells managers to begin preparing for a ‘potential layoff scenario’

Los Angeles Mayor Eric Garcetti instructed the city’s top managers on Friday to begin preparations for a “potential layoff scenario,” saying such measures may be needed to weather the budget crisis sparked by the outbreak of COVID-19.

In a four-page memo, Garcetti ordered various city managers to identify positions that could be proposed for elimination, examining employee work history and other issues. He also called on the city’s negotiators to work with public employee unions on cost-cutting proposals, including the possible postponement or outright cancellation of previously approved raises.

With revenue coming in $87 million below expectations for July and August, the first two months of the city’s fiscal year, Garcetti is also pressing department heads to find ways to cut costs another 3%.

“We must take action now to put ourselves in a better position to withstand the financial crisis created by the COVID-19 pandemic in our city,” the mayor wrote in his memo, which went to council members and the heads of most city agencies.

Garcetti’s instructions come as L.A. reaches the six-month mark in the pandemic, which has led to a major slowdown in tourism, a reduction in business activity and the temporary closure of cultural institutions. Sales taxes, hotel taxes, parking ticket proceeds and other revenue have come in lower than the projections established before the arrival of the outbreak.

New pay raises approved by Garcetti and the City Council also have put pressure on the city’s finances. Police officers are on track to receive a 4.8% raise over the course of the current fiscal year, along with new bonuses. Firefighters received a 4.75% increase in July; employees with the Coalition of L.A. City Unions are slated to receive two 2% raises between January and June.

In a status report issued Friday, City Administrative Officer Richard Llewellyn estimated the city could face a gap of $200 million to $400 million, even if the economy mostly recovers next year.

The council has responded to the crisis by signing off on furloughs — one unpaid day off every two weeks — for more than 15,000 workers starting mid-October. They reduced the budget of the Los Angeles Police Department by $150 million in July, taking the number of sworn officers down to its lowest level in a dozen years.

Craig Lally, president of the Los Angeles Police Protective League, said his union will continue to work with the city to address the budget crisis. But he also noted that the cuts made two months ago will leave the LAPD with 250 fewer officers by mid-2021.

“We encourage other city departments to make similar sacrifices to protect basic city services,” he said.

The league is pushing for city leaders to tap a portion of the funding L.A. received from the federal CARES Act, which provides money to help communities weather the coronavirus outbreak, to cover public safety costs.

Whether layoffs will ultimately be carried out, or are simply a bargaining chip as Garcetti seeks concessions from city unions, is not clear. In his memo, Garcetti did not even describe the furloughs as a certainty, saying the city may impose them on some workers.

Even with a looming budget gap, Garcetti and the council have declined to impose furloughs on a huge chunk of the workforce, exempting police officers, firefighters, nurses, librarians and building inspectors, among others. Council members also put a third of the money from the LAPD’s budget cut into a fund aimed at reducing the number of furlough days needed this year.

Bob Schoonover, president of Service Employees International Union Local 721, said Friday’s memo simply shows that city officials are preparing for the worst-case scenario, taking administrative steps “just in case revenues continue to fall short.”

He said his union, which represents about 12,000 city employees, would continue working with elected leaders on budget solutions.

Still, Schoonover remains an outspoken foe of the furlough program, saying it would hurt workers and cannot be imposed unilaterally. He and other union leaders have pushed for an alternative cost-saving initiative: buyouts of up to $80,000 to workers who are eligible to retire.

The council approved the buyouts in July but then found that the program drew a weaker-than-expected response from the workforce. It is now expected to save up to $14 million.

The financial crisis is the city’s most serious since the 2008 recession, which spurred city leaders to lay off workers, impose furloughs and give early retirement to 2,400 city employees. The city is still paying for the cost of that early retirement initiative, which provided pensions to departing workers up to five years ahead of schedule.

In April, during his yearly State of the City address, Garcetti said he expected this year’s economic downturn will be worse for the city than the one that began more than a decade ago.